'Opal' aided by marketing firm that targets teens

By David Mehegan, Globe Staff | May 8, 2006

Since the downfall of Kaavya Viswanathan, the Harvard sophomore whose novel was yanked from stores and whose two-book contract was canceled by her publisher last week, attention has focused on Alloy Entertainment, the little-known book packager that shared the copyright with her. What has received scant notice is that the parent company, Alloy Media + Marketing, is not really in the publishing business. It is an advertising and marketing firm that specializes in selling stuff -- and helping others sell stuff -- to teenagers and preteens.

Alloy's editors helped Viswanathan -- who had been referred to them by the William Morris literary agency -- lighten her tone and flesh out the plot of ''How Opal Mehta Got Kissed, Got Wild, and Got a Life." Though it remains unclear exactly what influence Alloy editors had, president Leslie Morgenstein wrote in an e-mail last week that no one helped Viswanathan write the actual words of the book that, it turns out, liberally borrowed from at least three authors.

Apart from two terse e-mail responses, Alloy has refused to talk about what it does and how. Jodi Smith, spokeswoman for the parent company, likewise rebuffed requests for an interview with senior executives.

But there's not much mystery about the operation.

According to the company's website, Alloy Media + Marketing was founded in 1997 by Matthew Diamond and James K. Johnson, now the chief executive and chief operating officers, respectively. Their idea was to help advertisers reach 10-to-24-year-olds, a demographic said to be 60 million strong with annual spending power of as much as $250 billion. The website says Alloy provides ''unique access to young consumers nationwide," boasting a database of 27 million e-mail and postal addresses.

To help reach the older youths, Alloy recently bought Sconex, a teen-chat website. Its 360 Youth advertising division targets teens in public schools, college bookstores, military bases, movie theaters, even bar restrooms: ''Restrooms are a welcome break from the message assault," says the website. ''We provide the perfect reading material -- your ad -- and they would have to be asleep not to read it and absorb your message."

Alloy also pursues the younger kids, the so-called ''tweens" between ages 8 and 12. Tweens spend $51 billion, Alloy's website says, and they ''influence major family purchases, everything from cars to computers." They're in school most of the time, but Alloy knows how to get ad messages to them: with textbook covers, free samples, and the Internet.

This total pursuit of teens and tweens was largely an Alloy innovation. Before it came along, the ad world was focused on the 18-to-44 segment, not the younger set, which was believed to be hard to reach and under parental control.

''Alloy was smart in that they saw the teen market was growing, projected to peak in 2010 or 2015," said Roberta Clarke, associate professor of marketing at Boston University. ''There are projected to be 35 million in the teen market in the next five years." And unlike kids of the past, they are free to spend. ''Seventy percent of undergraduates have credit cards, and 22 percent had credit cards in high school," Clarke said ''Credit cards give them an enormous amount of freedom, with no oversight by parents, which they never had before. It used to be that if you didn't have a car, you needed your mom to drive you to a store. But now they're buying online."

Alloy has perfected a kind of total immersion. ''They say they elevate brands as a part of daily life," Clarke said. ''That means, not just sticking an ad out there for Coke, but also having it in movie trailers, on TV shows, direct mail, building it into the school, the home -- wherever a teenager is. They understand the daily life of teens, how to infiltrate the daily lives of teenagers."

Product placement

In 2000, Alloy bought 17th Street Productions, renamed it Alloy Entertainment, and entered the book business.

The ''Opal Mehta" case, in which a teenager writing a novel was sent to Alloy for help, was atypical. Usually Alloy's team of about a dozen editors invents fiction for teen girls, turning out as many as 37 books a year, which are then marketed by brand-name publishers, such as Little, Brown, which published Viswanathan's.

Sometimes the editors themselves write the books, sometimes they find others to write them, and sometimes the books in one series are written by different people. Ann Brashares, author of the best-selling ''The Sisterhood of the Traveling Pants," which was made into a successful movie (coproduced by Alloy), is a longtime Alloy editor and executive.

These books are different from most, in which an author sells a license-to-publish to a publisher while retaining copyright. As with ''Opal Mehta," Alloy retains some or all of the rights to the books it works on.

More than books for reading, Alloy titles are content packages, with potential for advertising and cross-marketing. The Alloy website says, ''Advertisers have the opportunity to get their products or services cast in these best-selling books. The value of these mentions far exceeds the hundreds of thousands of readers, creating a viral product buzz." It is not known publicly whether Manolo Blahnik, Habitual jeans, or La Perla bras paid for their mentions in ''Opal Mehta."

The big-money potential, though, isn't in the printed book but in film and television versions, and here Alloy acts as a full partner. About eight books are being developed as movies with Universal, 20th Century Fox, Disney, and New Line Cinema. At least six TV productions are also in the pipeline. ''Opal Mehta" was to be developed as a movie by DreamWorks until the book was canceled. Variety has reported that the filmmaker is backing away from the film.

Despite all its experience and understanding of teens, one thing Alloy Media + Marketing has not mastered is making a profit.

''Since our inception," the company said in a recent SEC filing, ''we have incurred significant net losses, and as of January 31, 2006, we have an accumulated deficit of approximately $254 million. We have not historically been profitable." In the fiscal year that ended Jan. 31, Alloy reported sales of $195.3 million and a net loss of $35.7 million. The previous year's loss was $91.7 million.

One thing is clear: Despite all its early promise and promotion, ''Opal Mehta" will not be helping to pull Alloy Media + Marketing out of the hole.